Debt is a mistake between lender and borrower, and both should suffer.
Total borrowing has imploded. Private borrowing has collapsed. And, in effect, the Treasury Department is the last borrower left standing.
Morality aside, there are other factors deterring 'strategic defaults,' whether in recourse or nonrecourse states. These include the economic and emotional costs of giving up one's home and moving, the perceived social stigma of defaulting, and a serious hit to a borrower's credit rating.
